According to UNCTAD’s World Investment Report 2024, Egypt is the African country attracting the most foreign direct investment (FDI), followed by South Africa and Ethiopia. In this year’s report, Mozambique ranks sixth on the continent, with a total of 2.5 billion dollars, equivalent to a 2 per cent increase on the previous year.
According to the report, published by the United Nations Trade and Development (UNCTAD), FDI (Foreign Direct Investment) worldwide fell by 2 per cent in 2023, due to the economic slowdown and the increase in geopolitical tensions and protectionist policies.
Foreign direct investment flows to Africa also fell by 3%, to 53 billion dollars, as a result of the drop in two of the largest recipient economies: Egypt and South Africa.
Egypt, despite attracting the largest volume of FDI on the continent for the second year running, with 9.8 billion dollars, saw a 13.7 per cent drop compared to 11.4 billion dollars the previous year. South Africa, on the other hand, saw an even sharper reduction in FDI (43.5 per cent), with 5.2 billion dollars in 2023 compared to 9.2 billion dollars in 2022.
The next top African countries were, in this order: Ethiopia (3.3 billion dollars), Uganda (2.9), Senegal (2.6), Mozambique (2.5), Namibia (2.4), Nigeria (1.9), Ivory Coast (1.8) and DRCongo (1.6 billion dollars).
Mozambique more than doubled the value of new investment projects
The inflow of FDI into Mozambique, worth 2.5 billion dollars, the sixth highest on the continent, grew by 2 per cent compared to the 2.4 billion dollars obtained last year, although far from the peak reached in 2021, with 5.1 billion dollars.
As for the accumulated stock of foreign direct investment, growth was 4.9 per cent, rising from 54.5 billion dollars in 2022 to 57.3 billion in 2023.
The analysts add that Mozambique won ten new investment projects in 2023 (there were only eight the previous year) with a value of 3.13 billion dollars (more than double the 1.37 billion obtained in 2022). In the outflow, investments originating in Mozambique totalled 174 million dollars (564 million in 2022).
By sector, the continent mainly attracted new projects related to electricity and gas, followed by the mining industry and the chemical industry. Individual highlights include a green hydrogen megaproject in Mauritania, worth 34 billion dollars, which is more than the country’s GDP.
Africa also received more than 10 billion dollars in funding for wind and solar power generation projects last year, in Egypt, South Africa and Zimbabwe. Also in the spotlight is a new battery factory for electric vehicles in Morocco, worth 6.4 billion dollars.
It should be noted that the main economies investing in the continent over the last five years, by FDI stock, are the Netherlands, France, the United States, the United Kingdom and China.
Jaime Fidalgo
